A former national incumbent telco may be moving one step closer to a forced breakup.
BT Group has been accused by its competitors of threatening competition in the United Kingdom’s broadband market, according to a report in Bloomberg News. Moreover, at least one of the company’s smaller rivals is calling for the former national incumbent to be “broken up” the report cites.
BT owns Openreach, the UK’s only national wholesale broadband network. However, BT also sells broadband services through that network. This combination has raised competition concerns from Ofcom, the British regulator for communications services, and led to Openreach being legally “walled off” from its parent in 2017-18.
Seeking to head off an open row
In a move to placate BT’s rivals, Openreach has proposed a new pricing structure for internet service providers to use its network. The proposal, called Equinox 2, had been “provisionally approved” by Ofcom, but last week the regulator decided to extend its review of the deal.
According to Bloomberg, the big UK internet providers such as Vodafone, Sky and TalkTalk supported the price offer. But rival networks criticised the offer in submissions to the government regulator. The complaints, published this week, claimed that Openreach’s proposed pricing could undercut them.
The Independent Networks Cooperative Association (INCA), an association of alternative networks in the UK, said the proposals should be blocked as they will “starve them of demand and hurt investment and competition in the UK market”.
An Openreach spokesperson told Bloomberg: “we continue to share Ofcom’s initial view that our full—fiber pricing offer isn’t anti-competitive, and it’s important the regulator has time to consider all the feedback it has received fully and fairly”.
The regulator is reviewing the BT-Openreach separation
An Ofcom spokesperson told Bloomberg that alternative networks are a “vital part” of its strategy for better broadband. “We keep a close eye on Openreach to make sure it doesn’t use its position to distort competition,” they said, referring to the regulator’s Openreach Monitoring Unit. “If we see evidence of any company acting in a way that distorts or prevents competition, we won’t hesitate to step in.”